Table 13-2 -Refer to Table 13-2. Consider a Simple Economy That Is

question 212

Multiple Choice

Table 13-2

-Refer to Table 13-2. Consider a simple economy that is made up of only two sectors, households and firms, and that investment is autonomous. Further, disposable personal income = real GDP. Suppose that actual real GDP in this economy is $300 billion in a particular period. We would expect to see

• A) unintended reductions in inventory, planned investment will exceed actual investment.
• B) unintended reductions in inventory, planned investment will be less than actual investment.
• C) unintended increases in inventory, planned investment will exceed actual investment.
• D) unintended increases in inventory, planned investment will be less than actual investment.

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Definitions:

T Accounts

A representation in accounting used to track the increases and decreases in individual financial statement items.

Direct Labour Hours

The total hours worked by employees that can be directly associated with the production of goods or services.